US must cut agri subsidies by 19 bn dlr: WTO

Agencies|

Apr 30, 2007, 09.06 PM IST

0Comments

GENEVA: The United States must cut domestic agricultural support and trade distorting measures to below 19 billion dollars (14 billion euros), the World Trade Organisation's chief negotiator on agriculture said on Monday.

Crawford Falconer, the chairman of the WTO's special committee on agriculture, told the 150 member states it was "inconceivable" that Washington should be able to spend more on domestic support than the 19 billion dollars it is allowed now.

The current US proposal tabled in deadlocked global trade talks would allow Washington domestic support worth 22 billion dollars, Falconer said in a discussion paper released to try to spark the negotiations.

"It is frankly inconceivable that the US will come out of this negotiation with an entitlement to spend more on overall trade distorting domestic support than it had when it came in," Falconer said.

Rather, the "centre of gravity" around which negotiations will focus is "certainly below 19 (billion dollars) and somewhere above the very low teens," for the United States he stated.

The European Union, meanwhile, could cut its own overall trade distorting domestic support by a minimum of 70 per cent, and possibly up to 75-80 per cent, said Falconer, who is also New Zealand's ambassador to the WTO.

A 75 per cent cut in support measures conditionally offered by the EU would amount to some 27.5 billion euros, he added.

Agriculture has been a key stumbling block in the WTO's Doha round of trade negotiations, which were launched in the Qatari capital in 2001.

The US and EU have engaged in bitter arguments over the subject, with Brussels demanding more reductions in US farm subsidies and Washington insisting that proposed European tariff cuts do not go far enough.

In his paper, Falconer urged all parties to respond to his proposals in the hope of reaching an agreement, saying that "now is the time for honest talk."

"If we do not get serious momentum over the next few weeks ... we will either fail or we will put this whole exercise in the freezer for some considerable time until a better generation than us can thaw it out," he warned.